Masan Group. CEO Presentation. April 2012

Transcription

1 Masan Group CEO Presentation April 2012

2 Strong performance since listing 2

3 I always laugh when people ask me about rebounding techniques. I ve got a technique. It s called just go get the damn ball. Charles Barkley Former NBA basketball player 3

4 Our market cap has increased by ~ % vs market return of 23% since listing At listing (5 Nov 2009) Current (20 Apr 2012) Rank Company Market Cap US$b Rank Company Market Cap US$b 1 $3.1 2 $1.8 3 $1.6 4 $1.4 5 $1.1 6 $1.0 7 $0.9 8 $0.9 9 $ $ $3.7 2 $ $2.8 4 $2.6 5 $2.4 6 $2.4 7 $1.2 8 $1.1 9 $ $ Based on listing price of VND36, US$2.9b based on basic share count and US$3.9b based on fully diluted share count Note: Exchange rate of US$/VND=21,000 applied at listing and current market cap as of 20 April 2012 Source: Bloomberg as of 20 April

5 Masan Consumer has increased market share consistently Ranking Fish sauce 39% 55% 65% 76% #1 Soya sauce 66% 69% 70% 78% #1 Chili sauce 33% 36% 37% 37% 1 #2 Instant noodles 2% 10% 12% 16% #2 Instant coffee 44% # data Sources: Euromonitor for data and 2011 Instant coffee data / AC Nielsen for other 2011 data 5

6 which has resulted in profitability outperformance vs Vietnam peers and market Gross profit growth EBITDA growth Indexed (2007 = 100) Indexed (2007 = 100) 1, , Top 10 VN F&B 1 Top 10 VN F&B 1 VN Index VN Index Top 10 VN F&B companies include: Vinamilk, Vedan, Vinh Hoan, Hung Vuong, Kinh Do, Minh Phu, Sucreries de Bourbon Tay Ninh, Lam Son Sugar, Dabaco, Bien Hoa Sugar Sources: Bloomberg, Capital IQ, company annual reports 6

7 and vs leading Asia Pacific peers. 5-year sales growth 1 60% Y-Value 1 40% 20% 0% 0% 10% 20% 30% 2011 profitability margin 2 1. Revenue CAGR for period EBITDA margin Sources: Capital IQ, Bloomberg, company annual reports 7

8 Techcombank core profitability growth has been significant in comparison to Vietnam peers and market Operating income growth (excl. trading income) ( ) 80% Operating income growth (excl. trading income) Indexed (2007 = 100) 800 CAGR % 60% 61% 57% % 45% 40% 40% 36% % 25% 23% Other top 9 VN banks 31% 20% 200 9% 0% 0 VNI Index % Sources: Capital IQ, Bloomberg, company annual reports 8

9 and is focused on risk management to navigate Vietnam s volatile banking sector 2010 Liquidity 1 160% Y-Value 1 140% 120% 100% 80% 5% 10% 15% 20% 2010 Capital 2 1. Deposit to loan ratio 2. Capital adequacy ratio Sources: Analyst reports, annual reports, company websites 9

10 resulting in strong shareholder returns and trust of customers. Profitability ratio 1 30% Y-Value % 10% 0% 0% 10% 20% 30% 40% 50% Deposit growth rate 2 1. Average ROAE ( ). ROAE shown for Techcombank excludes the convertible subordinated debt issued in Dec Deposit CAGR for period Sources: Capital IQ, Bloomberg, company annual reports 10

11 Masan Resources: Relentless execution resulting in significant value creation Significantly de-risked the asset and advanced project development Valuation & returns Management team with deep mining experience 1600 US$ b 1 Licenses and permits ~4-6x multiple 800 Financing US$250mm US$500mm 200 Compensation & resettlement (97% completed) 0 Acquisition valuation Mount Kellett valuation Current valuation 1. Based on DCF analysis and comparable valuation method Source: Company 11

12 and strong financing track record vs peers. 500 Tungsten Price Total capital raised (US$mm, as of Apr 2012) All other new tungsten mines combined have raised ~US$250mm Nui Phao (Masan Resources) Sangdong Mine (Woulfe Mining) Dolphin (King Island Scheelite Ltd) Mt Carbine (Carbine Tungsten) Thor Mining (Molyhil) Lanna tungsten project (Amanta Resources) 6 Watershed (Vital Metals Ltd) Sources: Companies websites, annual reports, literature search, Bain analysis, Bloomberg 0 12 Jan-06 Jul-06 Jan-07 Jul-07 Jan-08 Jul-08 Jan-09 Jul-09 Jan-10 Jul-10 Jan-11 Jul-11 Jan-12

13 Masan business model thesis 13

14 Man who catch fly with chopstick accomplish anything Mr. Miyagi Master of karate, fictional character in the movie Karate Kid (1984) 14

15 Constraint Opportunity The opportunity is clear but how do you solve for Vietnam s risks and constraints? Top-down Bottom-up Fragmentation Underpenetration Volatility Management / Capital / Business model 15

16 Volatility, volatility, volatility Low / High vs average over last 5 years Country Currency 1 Interest rate 2 Inflation 3 Low High Low High Low High China (11%) +14% (64%) +125% (5%) +5% India (13%) +17% (93%) +293% (23%) +29% Brazil (18%) +26% (26%) +16% (13%) +17% Thailand (11%) +16% (58%) +69% (9%) +8% Indonesia (9%) +32% (50%) +63% (17%) +17% Philippines (12%) +15% (69%) +105% (13%) +13% Vietnam (14%) +14% (62%) +108% (30%) +42% 1. Currency volatility against US$ ( ) 2. Annual lending rate ( ) 3. CPI ( ) Source: Bloomberg 16

17 which will persist going forward... Total public debt as % of GDP 80% Interbank lending rate of major economies 5% Total public debt as % of GDP 4% 75% 3% 2% 70% Interbank lending rate of major economies 1% 65% % Note: Major economies include countries under G7 Sources: Bloomberg, Euromonitor 17

18 is coupled with Vietnam s constraints Lack of capital Lack of professional management Lack of scale and consolidation 14% 12% Capital market as % of GDP Average % 10% 8% 8% 6% 6% 5% 5% 4% 3% 2% 2% 0% MY CN IN PH TH ID VN 120% 100% 80% % of CEO with MNC experience in top 10 companies 80% 100% 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0.0% Average size of top 20 private sector companies as % of GDP % 2.2% 1.4% 1.1% 0.7% TH PH ID IN VN 1100 Bond market size (US$b) 1, % 40% 20% 10% 40% 50% 60.0% 50.0% 40.0% 30.0% 20.0% 10.0% Average % of equity held by largest shareholder for top 10 companies (Apr 2012) 53.0% 44.0% 41.0% 39.0% 28.0% 0 CN IN MY TH ID VN 0% VN ID TH MY SG 0.0% ID PH MY TH VN Note: ID: Indonesia / IN: India Sources: World Economic Forum Global Competitiveness Index, IFC Survey, Bloomberg, Capital IQ, Bain analysis 18

19 however, bottom-up structural consumption story in Vietnam is intact 2011 Consumer expenditure per capita (US$ thousand) Singapore South Korea 5 Indonesia Vietnam China Thailand Malaysia 0 0 India Consumer leverage (%) 1 US$1,000b total consumer expenditure 1. Total consumer loans by banks / gross GDP) Sources: Euromonitor, IMF, Global Financial Stock Database, Bain analysis 19

20 and the untapped resources sector potential is clear Vietnam estimated raw ore deposits and fine metals (mm tons) 100% 80% 60% China tungsten reserves (mm tons) % % 20% 0% Exploited reserves Licensed, unexploited Remained unlicensed China rare earth reserves (mm tons) 43-37% Sources: VinaConnect Report, Lit search, China Bureau of Statistic, Bain analysis 20

21 with significant opportunity to consolidate. Consumer products Market share of top 5 private consumer products companies (2011) 43% 44% 47% 37% 29% 53% Vietnam Indonesia Singapore Malaysia Thailand Philippines Market share of top 3 private banks in terms of deposits (2011) 70% 75% Banking 15% 19% 44% 52% Vietnam Indonesia Philippines Thailand Singapore Malaysia Sources: Bloomberg, Euromonitor, countries central banks, banks annual reports 21

22 Masan business model based on Vietnam s opportunity and constraint Opportunity Constraint Masan strategy Top-down Fragmentation Volatility Consolidation Tata model Bottom-up Underpenetration Management / Capital / Business model Transformation and Investment Local MNC 22

23 Top-down Tata model 23

24 It s not a question of learning much. On the contrary. It s a question of unlearning much Osho Indian professor of philosophy and spiritual teacher 24

25 Masan business model based on Vietnam s opportunity and constraint Opportunity Constraint Masan strategy Top-down Fragmentation Volatility Consolidation Tata model Bottom-up Underpenetration Management / Capital / Business model Transformation and Investment Local MNC 25

26 Jan-09 Feb-09 Mar-09 Apr-09 May-09 Jun-09 Jul-09 Aug-09 Sep-09 Oct-09 Nov-09 Dec-09 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11 Jan-12 Feb-12 Mar-12 We raised ~US$1b of capital throughout the cycle from best-in-class partners Performance of stock indices (Indexed to Jan 2009) VN Index Capital raised by Masan (US$mm) 108 MSCI Sources: Bloomberg, company 26

27 .we have been stringent in allocating capital Sources (US$ mm) Uses (US$ mm) 2011 Beginning Cash & equivalents 185 Payments for acquisition of VCF, net of cash 2 39 Cash raised at MSN and Sub 645 Payments for CAPEX at Subs (MR & MC) 126 Internal cash generated Payments for Increase stake in TCB 48 Total 938 Total 212 Current cash available for M&A and investments: ~US$600 3 million 1. Includes cash interest 2. Consideration paid for acquisition was US$52mm, cash acquired was US$13mm 3. Cash and cash equivalents including short term investments as of 27 March 2012 (US$726 million), minus contingency / cash reserve for Masan Resources Note: Figures as of 27 March 2012, assuming exchange rate of US$/VND=21,000 Source: Company 27

28 and have generated strong returns through M&A. Company Transaction Cash component (US$mm) Returns Consolidation of stake from 54.8% to 76.5% (101) 1 2.1x Acquisition and consolidation of stake 93 2 ~5.0x Acquisition of 50.3% stake x 1. Net of US$159m in cash received from KKR for 10% stake 2. Takes into account cost of call option for additional 15% stake (US$70mm) Note: Assuming exchange rate of US$/VND=21,000 Source: Company 28

29 Business performance has increased our market value Masan market capitalization status quo 1 US$mm 1, At listing 2 Masan Consumer Operational performance Techcombank Operational performance Dec Status quo i.e. no transactions 2. Assuming MC valued at 15x forward P/E at listing and TCB valued at 11x forward P/E Note: Assuming exchange rate of US$/VND=21,000 Sources: Company analysis, Bloomberg 29

30 but does not tell the whole story as significant shareholder value has been created through capital allocation. Masan market capitalization US$mm 3,895 1,931 >50% of value creation due to M&A and consolidation Dec-11 MC and TCB stake consolidation M&A Dec-11 1 Operational performance 1. Equity value calculated on SOTP basis: assuming MC and Vinacafe valued at 20x forward P/E (based on regional comparables factoring in Vietnam discount), TCB valued at 11x forward P/E, MR valuation based on DCF analysis and comparables method Note: Assuming exchange rate of US$/VND=21,000 Sources: Company analysis, Bloomberg 30

31 Bottom-up Local MNC 31

32 Every act of creation, is first an act of destruction. Pablo Picasso Famous Spanish artist 32

33 Masan business model based on Vietnam s opportunity and constraint Opportunity Constraint Masan strategy Top-down Fragmentation Volatility Consolidation Tata model Bottom-up Underpenetration Management / Capital / Business model Transformation and Investment Local MNC 33

34 How do we judge transformation? Brands Distribution Management Risk management Facilities Relentless execution Capital 34

35 Brands Fish sauce Soya sauce Chili sauce Launched 2003 Launched 2002 Launched 2007 Launched 2007 Launched 2009 Launched brands in top 50 F&B brands in Vietnam 1 #1 brand in sauce and seasoning in Vietnam 2 Launched 2003 Launched 2000 Instant noodles Launched 2007 Launched 2009 Launched 2010 Launched 2011 Instant coffee Original instant coffee Instant milk coffee Roasted ground coffee Instant cereal nutritious powder 1. Based on Vietnam s top 500 companies using FTA ranking 2. Voted #1 from 2004 to 2010 by Saigon Marketing,(Vietnam s most prestigious marketing trade journal) Source: Company 35

36 Distribution No. of points of sale 163, , , ,470 Largest nationwide distribution network in Vietnam 126,389 94,813 93,000 90,000 85,000 MC 2011 Unilever1 Vinamilk MC 2010 MC 2009 MC 2008 Trung Nguyen Nestlé Asia Food 1. Active points of sale Source: Masan Consumer management 36

37 Production facility 37

38 Product facility transformation First fully automated fish sauce production line in the world Facilities adhere to HACCP standards 38

39 Management Truong Cong Thang CEO 2002 Jeremy Clarke 1 Chief Operating Officer 2012 Nguyen Tuan Viet Director of Marketing, Convenience Foods 2011 Ho Bao Long Chief Customer Officer % of current executive management with MNC experience vs 30% in 2008 Keir Steinke 2 Head of R&D 2012 Le Thi Nga Deputy Head of R&D 1997 Pham Dinh Toai Chief Financial Officer 2009 Nguyen Thi Thu Ha Director of Supply Chain 2011 Pham Hong Son Chief Product Supply Capabilities Development Officer 1999 Vu Quoc Tuan Chief Manufacturing Officer Hired, but not joined. Experience includes: Asia Pacific Category Strategy Director at Kraft Foods, >20 years of MNC experience 2. Hired, but not joined. Experience includes: VP of Unilever R&D for Europe and Greater China, >25 years with Unilever Source: Company 39

40 Distribution No. of branches and TSOs (2011 JSCB ranking) No. of ATMs (2011 JSCB ranking) 1, rd largest distribution network and #1 ATM network amongst JSCBs Sources: Company, companies websites 40

41 Management Simon Morris CEO 2012 Phung Quang Hung Chief Technology and Operation Officer 2009 Truong Gia Tu Deputy Head of Risk Management 2010 Dang Tuyet Dung Head of Personal Financial Services 2009 Le Xuan Vu Head of Strategy & Corporate Development 1996 >70% of current senior management with MNC experience vs 25% in 2008 Cu Anh Tuan Head of Finance & Planning 2011 Pham Quang Thang Small & Medium Enterprise 1994 Nguyen Cong Thanh Head of Corporate Banking 2010 Phan Thanh Son Head of Treasury 2011 Bach Thuy Ha Head of Transaction Banking 2009 Nguyen Canh Vinh Head of Sales & Distribution 1996 Do Diem Hong Head of Financial Institutions 2008 Source: Company 41

42 Mine C&R map as of June 2010 From 2% of compensation and resettlement completed at acquisition Land transferred Source: Company 42

43 Mine C&R map as of April 2012 to 97% of compensation and resettlement completed currently Land transferred Source: Company 43

44 Mine site at acquisition 44

45 Mine site currently On track to commence operations in March

46 Management Dominic Heaton Chief Executive Officer 2010 Vu Hong Deputy Director General 2006 Dale Smith Construction Director 2011 Craig Bradshaw Operations Director 2011 Paritosh Gupta CFO 2012 Russell Griffin Sales & Marketing Director 2011 Significant experience in building mines in Southeast Asia Source: Company 46

47 Creating value for shareholders 47

48 I want to put a ding in the universe Steve Jobs Co-founder of Apple 48

49 We have built the platform for the future Risk management and capital allocation platform ~US$600million cash reserves 1 ~US$500 million consolidated steady state 2 EBITDA by 2014 Consumer platform #2 F&B company 3 Financial services platform #2 private sector bank 4 Mining platform #1 private sector resources company 1. Cash and cash equivalents including short term investments as of 27 March 2012 (US$726 million), minus contingency / cash reserve for Masan Resources 2. Without M&A 3. In terms of sales 4. In terms of total deposits Source: Company 49

50 Each of our sectors has significant growth potential Our sectors will represent 50% of GDP % contribution to Vietnam value added 2016 Backed by strong growth potential Vietnam value added CAGR 24% Others 36% Consumption 36% 12% 11% 9% Agriculture 13% Mining 9% Financial Services 6% Financial Services 2% Mining F&B Others Agriculture Sources: Global Insights, Bain analysis 50

51 and we have significant room to expand into adjacencies. Consumption Financial services Resources US$140b Other consumption related sectors 2016 total Vietnam sector revenue US$19b Other financial services Other mining US$36b FMCG US$35b SME and consumer banking US$8b Mining of metals and quarry US$3b Sources: Euromonitor, Global insights, Bain Analysis 51

52 We benchmark ourselves to the best Regional leaders Valuation multiple Average trading multiple 1 Consumer P/E 27.9x Financial Services P/B 2.5x Mining EV/EBITDA 14.2x multiples Source: Bloomberg 52

53 Our goals are big #1 Market cap of 10% of Vietnam s GDP by 2020 #1 in each of our verticals US$1b of consolidated EBITDA by place for talent in Vietnam 53

54 Best person for each job 54

55 Because, in my dreams we are together. Dom Cobb Corporate spy, fictional character in the movie Inception (2010) 55

56 Chairman and Vice Chairman with a vision Nguyễn Đăng Quang Chairman Hồ Hùng Anh Vice-Chairman 56

57 Our leadership Trương Công Thắng CEO Masan Consumer Nguyễn Thiều Nam Deputy CEO Masan Group Dominic Heaton CEO Masan Resources Simon Morris CEO Techcombank 57

58 Our team 58

59 New office opening in Singapore 59

60 Disclaimer This Presentation has been prepared by Masan Group Corporation and/or its affiliated companies (collectively, MSN ; together with any officer, director, employee, advisor or agent of MSN, collectively, the Preparers ) for the purpose of setting out certain information in respect of MSN s business activities and strategy. While the information contained in this Presentation is believed to be accurate, the Preparers have not conducted any investigation with respect to such information. THE PREPARERS HEREBY EXPRESSLY DISCLAIM ANY AND ALL LIABILITY FOR REPRESENTATIONS OR WARRANTIES, EXPRESSED OR IMPLIED, CONTAINED IN, OR FOR OMISSIONS FROM, THIS PRESENTATION OR ANY OTHER WRITTEN OR ORAL COMMUNICATION TRANSMITTED TO ANY INTERESTED PARTY IN CONNECTION WITH THIS PRESENTATION. In particular, but without limitation, no representation or warranty is given as to the achievement or reasonableness of, and no reliance should be placed on, any projections, estimates, forecasts, analyses or forward looking statements contained in this Presentation, which involve by their nature a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from those expressed or implied in this Presentation. Only those particular representations and warranties that may be made in a definitive written agreement, if, as and when one is executed, and subject to such limitations and restrictions as may be specified therein, shall have any legal effect. NONE OF THE PREPARERS NOR ANY OF THEIR RESPECTIVE REPRESENTATIVES SHALL BE LIABLE FOR ANY LOSSES OR DAMAGES, WHETHER DIRECT, INDIRECT, CONSEQUENTIAL OR OTHERWISE, SUFFERED BY ANY PERSON RELYING ON ANY STATEMENT IN OR OMISSION FROM THIS PRESENTATION, ALONG WITH OTHER INFORMATION FURNISHED IN CONNECTION THEREWITH, AND ANY SUCH LIABILITY IS EXPRESSLY DISCLAIMED. Except to the extent otherwise indicated, this Presentation presents information as of the date hereof. The delivery of this Presentation shall not, under any circumstances, create any implication that there will be no change in the affairs of MSN after the date hereof. In furnishing this Presentation, the Preparers reserve the right to amend or replace this Presentation at any time in their sole discretion and undertake no obligation to update any of the information contained in this Presentation or to correct any inaccuracies that may become apparent. THIS PRESENTATION IS NOT INTENDED TO SERVE AS THE BASIS FOR ANY INVESTMENT DECISION. THIS PRESENTATION DOES NOT CONSTITUTE OR FORM PART OF ANY OFFER OR INVITATION TO SELL, OR ANY SOLICITATION OF ANY OFFER TO PURCHASE, ANY SHARES IN MSN OR ANY OTHER ENTITY, NOR SHALL IT OR ANY PART OF IT OR THE FACT OF ITS DISTRIBUTION FORM THE BASIS OF, OR BE RELIED ON IN CONNECTION WITH, ANY CONTRACT OR COMMITMENT OR INVESTMENT DECISIONS RELATING THERETO, NOR DOES IT CONSTITUTE A RECOMMENDATION REGARDING THE SHARES OF ANY ENTITY. 60